Summary and implications

On 15 February, the Government’s response to their 17 November 2010 consultation on the CRC Amendment Order was published, confirming that the proposed Amendment Order was to be adopted in substantially the same form as proposed.

On 16 February, the final version of the CRC Energy Efficiency Scheme (Amendment) Order 2011 was published, to be laid before Parliament for enactment by 1 April 2011.

The amendments to the CRC Order are primarily focused on extending the introductory phase and postponing the first allowance sale. This is intended to facilitate future amendments to be made as a result of the Government's “broader simplification review”.

The substantive changes that will be enacted include:

  • The first sale of allowances to take place in 2012 instead of 2011, postponing the financial implications of the scheme for participants. Participants would therefore be able to purchase allowances to cover their 2011/12 emissions at the end of the 2011/12 compliance year. As a result, for the first year at least, businesses would not have to forecast their emissions but would simply pay for those previously emitted;
  • The qualification year for phase two and subsequent phases to be postponed by two years, e.g. for phase two from 2010/11 to 2012/13; and
  • The information disclosure requirement for businesses consuming less than 6,000MWh electricity to be removed.

The Performance League Table will be retained as the main reputational driver within the scheme, with the metric weightings and publication dates as envisaged in the current legislation (including the October 2011 table).

As previously announced, the revenue recycling element of the scheme has been removed, however, as this was never actually part of the CRC Order itself (and was subject to different legislation), no amendments have been proposed in this consultation.

If you are already registered under the CRC or may be in the future, you should be alive to how the changes in the scheme will affect you. As reported in our last edition, the next round of reforms is currently under consultation (just about to close) and is likely to result in further, potentially substantial, reforms of the scheme.